Correlation Between Converge Information and Wilcon Depot
Can any of the company-specific risk be diversified away by investing in both Converge Information and Wilcon Depot at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Converge Information and Wilcon Depot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Converge Information Communications and Wilcon Depot, you can compare the effects of market volatilities on Converge Information and Wilcon Depot and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Converge Information with a short position of Wilcon Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Information and Wilcon Depot.
Diversification Opportunities for Converge Information and Wilcon Depot
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Converge and Wilcon is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Converge Information Communica and Wilcon Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilcon Depot and Converge Information is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Converge Information Communications are associated (or correlated) with Wilcon Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilcon Depot has no effect on the direction of Converge Information i.e., Converge Information and Wilcon Depot go up and down completely randomly.
Pair Corralation between Converge Information and Wilcon Depot
Assuming the 90 days trading horizon Converge Information Communications is expected to generate 0.93 times more return on investment than Wilcon Depot. However, Converge Information Communications is 1.07 times less risky than Wilcon Depot. It trades about 0.03 of its potential returns per unit of risk. Wilcon Depot is currently generating about -0.32 per unit of risk. If you would invest 1,626 in Converge Information Communications on August 31, 2024 and sell it today you would earn a total of 14.00 from holding Converge Information Communications or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Converge Information Communica vs. Wilcon Depot
Performance |
| Timeline |
| Converge Information |
| Wilcon Depot |
Converge Information and Wilcon Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Converge Information and Wilcon Depot
The main advantage of trading using opposite Converge Information and Wilcon Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Converge Information position performs unexpectedly, Wilcon Depot can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Wilcon Depot will offset losses from the drop in Wilcon Depot's long position.| Converge Information vs. Manulife Financial Corp | Converge Information vs. Transpacific Broadband Group | Converge Information vs. Union Bank of | Converge Information vs. Globe Telecom |
| Wilcon Depot vs. GT Capital Holdings | Wilcon Depot vs. Allhome Corp | Wilcon Depot vs. Jollibee Foods Corp | Wilcon Depot vs. LFM Properties Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.
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